Saturday, May 15, 2010

Here's a joke. Maybe Woody Allen wrote it... I got it from Thos. Cathcart & Dan Klein's "Plato and a Platypus Walk into a Bar..."A painter goes to the gallery where his work is showing. He asks the curator how business is for his paintings...Curator: "Well, I have Good news and bad news. A man came in and asked me if you were a painter whose work would become more valuable after your death, and I told him I thought so. He bought everything of yours in the gallery."Painter: "That's terrific! What's the bad news?"Curator: "He was your doctor."

Funny "ha-ha," or funny "hmmm...?" The comedian, whoever it was, knew the real score. The health care industry makes money off of the sick, not the healthy. I'm not saying it's anybody's fault, it's just how it is. Like the Green Movement, Health Care Reform’s success may depend upon how we change our point of view, and what we reward.

On March 23, the "Patient Protection and Affordable Care Act," or, P-PACA, became law. Rolling behind us like a giant ball in a tomb raider movie, will we escape or be smooshed? We all would like to know what our options are going to be.

The Economics of Health Care is weird. It's tangled up like spaghetti, and there are exceptions to everything, which is probably why Congress got involved in the first place.

We look at Health in a weird way. We call it "Health Care," but it's really "Sick Care." At the core of the problem may be the fact that we don’t measure health, we measure sickness. Let’s look at three strange features of Sick Care in America:

It’s insurance!

The healthcare industry makes no money on "health"

There is no profit in CURES

It's Insurance!Actually two things are going on here. One is how they measure risk, the other is how they pay on claims. Insurance actuaries are mathematicians who measure the probability that the insurance company will have to pay. They work from morbidity and mortality data, like "deaths per 1000 pop." They do not have “healthy” facts, so insurance measures sickness rather than health. Therefore, they pay for sickness rather than health. Clear as mud?

Now, insurance works sort of like a lottery, when you think about it. Everybody puts their money in. The Lottery Commission and the lottery operator take their profit, and a lucky few get what's left. Sort of. (The weird thing about health insurance is that most folks don't really want to get their money's worth out of it. ) Because we all eventually need medical care as we get older, it needs to function as a kind of savings plan, where you pile up money for that day when it rains on your parade. If we were all Vikings, and folks were dying right and left without the opportunity to "use" their portion of health care, insurance might be an appropriate vehicle to fund this. But, market forces seem to befuddle this plan.

So, what's the problem? IMHO, “Excess cash." The problem starts because you have all that money lying around. Folks start looking for ways to get some of it.

[Imagine 2000 words of boring economic fact and fiction have been deleted right here.]

Health care practitioners (some of them are doctors) make claims to insurance companies for whatever they have done for (to) their customers (some of them are patients). Insurance companies have people who review their reports/requests and find reasons why they should not get all they are asking for. Things like "telling Mrs. Smith to take two aspirin and call you in the morning are not reflective of eight years of college and five years of Residency, Dr. Brown. You did not actually treat her. You may have $23.50 instead of the $82.99 you are requesting."

Basically, money and effort flows to things that are allowed to be called Sick Care and tap into those piles of cash. Market forces figure out quickly what pays and what does not. Doctors submit claims for payment, and certain items, like prescriptions and lab tests, are nearly automatic “proof” that the doctor did something and will get paid the largest covered amount.

Lab Tests are covered, and they “support” claims. So, we have incentives for more and fancier tests. Studies claim that half are not needed. Which ones? YOUR half, not MY half! The doctor has a covered appointment with you to discuss the results. Prescriptions medicines have similar forces. You can make up the details, I've got you paranoid enough, haven't I?

Certain procedures get money, and others don't. C-sections are said to be "an epidemic." One 80-year old man can't get continuing treatment for Lyme disease, but another gets an all-expenses paid open heart surgery. And how about those ads on TV for the motorised chairs? I won't even have to do the paperwork to get one!

There is no money in "health."This fact is so obvious we miss it. Healthy folks don't need Sick Care. There actually IS money in health, just not for the Sick Care industry. Doctors don't get a bonus if they have healthy customers. Those of you from the American Ethos, think "Maytag Repairman" here. We talk about paying teachers for student success, but we won’t pay doctors for healthy patients, or for cures. We pay them for sick patients and “treatment.”

There is no money in CURES … and not much fame, either.

For all the money the drug companies spend on research, most goes into stuff to ameliorate symptoms, NOT into cures. At least, I don't see them bragging about any cures in all their ads on TV...

Picture this: the scientist says "For $30 million, I can (a) develop the cure or; (b) develop a medicine to keep the disease from killing them for 20 years." The business analyst, ever representing the interests of the stockholders, sits down and says "we can sell 20 pills of this medicine to a patient, and (s)he never buys another. If we sell them at $20 per pill, it will be bad press, and will still only be $400. If we sell these other pills at $1 each, and they take one a day for the rest of their lives, we make $7300 over 20 years. This makes perfect sense to me. No, tell you what, make them smaller and they'll take three pills a day ..."

Folks blame racism, homophobia and religious fanatics for not curing HIV in 30 years. But it’s pure economics. We have medicines to keep HIV patients alive for 20 years at what, $20K or more per year? And they could make fifty bucks off of a cure?

We learned our lesson from Jonas Salk and the polio vaccine, you know. He displaced a massive industry with this vaccine of his. IF you use a computer, chances are slim that you are old enough to remember much of polio, it has been cured so long. But most of you have seen the photos of 100s of iron lungs. A five-dollar vaccine replaced a ten-thousand dollar machine. Workers built all of those things, people had to operate and repair them, and nurses went about doing nurse things. Somehow the pictures of all of them empty looked sadder than the pictures of all of them full.

MY pet peeve is ulcers. Caused by simple bacteria (H. pylori), cured by standard antibiotics, it persisted until well into the 1980's, largely because there was a HUGE industry of antacids, psychiatry, and surgery around it, in spite of the fact that nobody actually knew what caused it. Doctors and pill manufacturers were raking it in. In classic Old Testament style, if you had ulcers, it was your own fault. In 1978, a Tagamet prescription cost $10 a day, and you could take it for life. The cure cost a TOTAL of $10 at that time. What is amazing is that it took until 1982 before researchers looked for bacteria! You "grassy knoll" sorts who are interested in class action lawsuits might suspect someone actually knew before this time.

We remember Jonas Salk, but he did not get a Nobel prize. His vaccine was not the cheapest version, the oral vaccine was. Do you recall who invented that? (Albert Sabin). He didn't get the Nobel prize either. Did you know who Marshall & Warren were, or that they got the Nobel prize for medicine in 2005? They found the ulcer bacterium. Twenty-seven years later... the list of doubtless valuable but unconvincing awards in the intervening years is mind-bogglingly dull.

Today, the funding for CURES comes from walkathons, bikeathons and road races. I am sure funding comes from other charitable giving, but I do like the HEALTH industry getting involved in generating research funding. The important point is that funding for cures comes from charitable giving, not from profit-seeking. Any "sane" profit seeking organization will not spend a dime on the cure. And that is crazy!

In short, Health Care will continue to be weird as long as the incentives are weird. For REAL "Health Care" today, you have to pay the whole bill yourself, and you are swimming in a largely unregulated shark pond of charlatans selling supplements, exercise machines and books all promising to make us more beautiful and fit without any effort. In the middle of all this are honest brokers of health, nutrition and fitness who get lumped in with all of the wackos and carnival barkers.

EPILOGUE: Perhaps keenly aware of the fact that “health” was, in fact, missing from the contents of Health Care Reform, our elected officials dedicated a very small portion of P-PACA to squarely address this by pushing the problem onto someone else. They created a committee to study the obvious and deliver a report during the next few years. Their (the commitee's) greatest challenge may be in finding ways to counterbalance the weirdness and generate some real spending towards health care instead of sick care.